Welcome to The New Social Worker's Blog

The New Social Worker is the quarterly magazine for social work students and recent graduates, focusing on social work careers for those new to the profession. This blog is a companion to the free online magazine at http://www.socialworker.com.

Friday, February 25, 2011

Money Money Money Money... Money!

How does a University choose what to make a part of their mandatory curriculum, what to make optional, and what isn’t even offered in their course offerings book?

Personally, I’ve never understood why I needed to learn the circumference of a trapezoid, as I have yet to ever use such in my life. (In full disclosure though, my math score on the GRE left something to be desired.) After talking with many friends in the social work profession, I continue to be surprised by how many money mistakes are made, mostly out of never being taught otherwise. Why there isn’t a mandatory class on this, I’ll never know.

While I don’t claim to be an expert, I thought I’d share some information here, for those who wish to become better educated on the subject. (For those wanting even more, fellow social worker Suze Orman is a great place to start as her show/books/website are full of info!) The following list comes out of many conversations with many social workers who too often realize their financial mistakes too late.------------------------------------------------------------

MISTAKE #1: Starting Off On the Wrong Foot

After being a middle school kid with an allowance, a high school youth with a part-time job, and a broke college student, it’s no wonder that many begin first jobs with a desire to spend some (or lots) of that money as soon as it starts to come in. However, the sooner wise financial choices are made, the smaller the chances are that you’ll find yourself at age 30, 40, or 70 and having to return to the financial life of ramen noodle dinners.

One of the most important pieces of information I ever received was to begin to plan for retirement ASAP. It sounded silly to me, while in my mid-20s, to think about something 50+ years away, but it’s one of the best choices I’ve ever made. Investing in a retirement account works on something called compound interest, which means that, the earlier you begin to save, the more the money grows on its own for you.

Here’s the actual math for you, both on why compound interest is awesome and why it pays (literally!) to start early: http://www.getrichslowly.org/blog/2006/05/23/how-compound-interest-favors-the-young/

For more info on why it’s important to begin saving in your 20s: http://articles.moneycentral.msn.com/CollegeAndFamily/MoneyInYour20s/ToGetRichStartSavingInYour20s.aspx

For info on how to save while you’re a student, unemployed, or aren’t making much for other reasons: http://articles.moneycentral.msn.com/Investing/SimpleStrategies/HowToInvestWhenYoureBroke.aspx

MISTAKE #3: Thinking You Have to Make Major Money to Thrive

It’s pretty well assumed that none of us became social workers for the money, but that doesn’t mean you can’t live a wonderfully happy life or save for big purchases (a home, a vehicle, a vacation, etc.) if you make wise financial choices.

An article on getting by and thriving on 32,000/yr: http://articles.moneycentral.msn.com/Investing/StockInvestingTrading/Getting-by-on-32000--MSNMoney.aspx

It’s long been said that money is the cause of many break-ups, which often happens because couples aren’t up-front about their finances. Granted, it’s far more fun to discuss a romantic getaway (or to go on one) than to talk about how it’ll be funded, but knowing where both people stand is crucial to figuring out whether you are as financially compatible as you are emotionally/physically/intellectually matched.

Tax information, interest rates, and banking rules all change over time, yet some money beliefs seem to transcend, causing people to believe what they’re told and then acting on wrong information. Here are a few myths vs. facts:

As you can see from the links and the information those pages link you to, there is a ton to learn about money. It can feel quite overwhelming at first, but the more you know, the more powerful you are in terms of your current and future finances. With so many books, websites, and other media based on financial education, there’s someone out there for us all to learn from, in whatever financial style suits us each best. Personally, I’ve found the aforementioned social worker Suze Orman is a great source of information and inspiration. Her weekly tv show on CNBC has taught me a great deal over the years (I even appeared on it once!), and I continue to refer to her books “Young, Fabulous, and Broke” and “Women and Money” as I’ve transitioned from undergrad to grad school, from student to unemployed, and as I’ve begun to earn my first salaried paychecks.

I know that this isn’t the typical “easy reading” blog entry you’re used to from me, but I hope it’s been a helpful post. In the spirit of both social work and money management, I will close this in the way that Suze Orman’s ends each episode of her television show: